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Lawmakers look to prevent drug makers from thwarting generic competition
For the third time in less than two years, congressional lawmakers have introduced a bill designed to end a practice that generic drug makers say is used by brand-name rivals to thwart competition.
Known as the Creating and Restoring Equal Access to Equivalent Samples Act, the bipartisan legislation comes amid ongoing complaints that brand-name drug makers sometimes refuse to provide samples to generic companies. They need samples to prove their copycat versions are equivalent to the brand-name drugs in order to pass regulatory muster. And the problem has worried the US Federal Trade Commission.
The most common complaint involves exploiting a regulatory program called the Risk Evaluation and Mitigation Strategies, or REMS. To boost patient safety, the Food and Drug Administration can require brand-name drug makers to develop a REMS plan when a medicine is approved. This may involve disseminating physician and patient education information or monitoring distribution.
More recently, the issue cropped up in connection with Turing Pharmaceuticals when it was run by Martin Shkreli. After buying a life-saving medicine last year and jacking up the price by about 5,000 percent, from $13.50 a pill to $750, Turing restricted distribution. This made it difficult to obtain samples, although the drug was not covered by a REMS plan. So unlike the previous bills, the latest legislation is targeting any company that denies samples.
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“Pharmaceutical companies should be compensated for their important work developing life-saving treatments, but predatory practices at the expense of consumers are unacceptable,” said Senator Patrick Leahy, a Vermont Democrat and one of four senators to sponsor the bill, said in a statement. And as the ranking member of the Senate Judiciary Committee, he plans to hold a hearing next Tuesday on the topic.
The legislation would allow the secretary of Health and Human Services to vet the request for samples and create a “cause of action,” presumably making it easier for a generic company to go to court in hopes of forcing a brand-name rival to make samples available. Of course, this assumes the generic company can provide sufficient evidence that samples were denied. The bill would also authorize a judge to award damages to deter brand-name companies from playing delaying games in the future.
Whether the legislation will gain any traction is unclear. The two previous attempts stalled, although both focused only on drugs covered with a REMS plan. At the time, the generic industry trade group released a study showing the tactic cost the US health care system about $5.4 billion in annual drug spending that could have been saved if generic versions of 40 drugs had been allowed to reach consumers.
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Given the controversy over the cost of medicines, however, any effort to promote competition and maybe even lower prices might stand a better chance of winning support. The bill was praised in a blog post written by Geoffrey Manne, an attorney who specializes in antitrust law and economics, and heads the International Center for Law and Economics, a think tank based in Portland, Ore.
The “bill is a well-thought-out and targeted fix to an imperfect regulation (concerning REMS) that seems to be facilitating anti-competitive conduct by a few bad actors,” he wrote. And he added that it does so “without imposing excessive cost or risk on the majority of brand manufacturers that behave perfectly appropriately under the law.”
A spokeswoman for the Pharmaceutical Research and Manufacturers of America, the trade group for brand-name drug makers, sent us a note saying that REMS are a critical regulatory tool for protecting patient safety. While we are currently reviewing the legislation, we would be concerned if patient safety could be jeopardized in any way.
The other senators who are sponsoring the bill, by the way, are Chuck Grassley, an Iowa Republican; Amy Klobuchar, a Minnesota Democrat; and Mike Lee, a Republican from Utah.
The bill has backing from AARP; Consumers Union; Public Citizen; the American College of Physicians; the American Hospital Association; the Healthcare Supply Chain Association; the National Association of Chain Drug Stores; the Pharmaceutical Care Management Association; Express Scripts; the Blue Cross Blue Shield Association; the AFL-CIO; the American Federation of Teachers; and the UAW Retiree Medical Benefits Trust, among others.
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